Question

Bryn invest 500$ in an account with a 2.1% annual interest rate compound annually. If Bryn does not make any other deposits or withdraws, how much will be in her account after 4 months? 2 years?

Answer 1

To calculate the amount in Bryn's account after a specified time period, we can use the formula for compound interest. After 4 months, Bryn's account will have approximately $502.43. After 2 years, Bryn's account will have approximately $521.60.

Step-by-step explanation:

To calculate the amount of money in Bryn's account after a certain period of time, we can use the formula for compound interest:

A = P (1 + r/n)^(nt)

• A represents the amount of money in the account after the specified time period
• P represents the principal amount (initial investment)
• r represents the annual interest rate (in decimal form)
• n represents the number of times interest is compounded per year
• t represents the time in years

In this case, Bryn's initial investment is $500, the annual interest rate is 2.1% (or 0.021 as a decimal), and interest is compounded annually.

After 4 months:

Using the formula, we have:

A = 500(1 + 0.021/1)^(1/3)

A ≈ 502.43

Therefore, after 4 months, Bryn's account will have approximately $502.43.

After 2 years:

Using the formula again, we have:

A = 500(1 + 0.021/1)^(1*2)

A ≈ 521.60

Therefore, after 2 years, Bryn's account will have approximately $521.60.